Background

The economic case for the African Continental Free Trade Area (AfCFTA) is now well established. Modelling work carried out by ECA shows that, with successful AfCFTA implementation, intra-Africa trade and continental GDP are likely to grow substantially, while the levels of poverty across the continent are projected to fall by significant margins. These findings are corroborated by similar work done by other institutions, including the World Bank and the International Monetary Fund (IMF).

When it comes to the implications of the AfCFTA on the environment generally, and on climate change particularly, however, there is still need for further research. As international trade contributes to development, it also contributes to environmental harm in different ways. For example, international trade in goods inevitably involves transportation over long distances, thereby causing significant greenhouse gas emissions (GHG) emissions. Likewise, trade can also encourage unsustainable use of living or non-living resources, thereby causing its own environmental damage.

Climate change today represents a serious threat to humanity. Africa contributed little to causing global warming, but it is already suffering the worst of its consequences. As a result, Africa cannot afford to be a bystander on the climate issue. The fact that it did not cause the problem in the first place does not help Africa in any way today; only successful efforts to mitigate climate change and adapt to its consequences can make a difference for Africa.

In appreciation of this reality, most African countries have undertaken commitments, in the form of nationally determined contributions under the 2015 Paris Agreement on climate change as well as in other ways.

Key Questions

The potential impact of AfCFTA implementation on climate change – negative, positive or neutral – thus needs to be examined systematically and rigorously. As the developmental benefits of the AfCFTA become clearer, questions are being asked about its implications for the environment generally, and for climate change particularly. Among these questions are:

• To what extent can increases in intra-African trade resulting from the AfCFTA be achieved without causing significant adverse impacts on the environment?
• How far does the design and text of the AfCFTA Agreement take into account environmental considerations?
• To what extent can the AfCFTA accommodate sustainable development in addition to its immediate objectives of facilitating cross-border trade in Africa?
• What, if any, can be done to reduce the environmental footprint of the AfCFTA at the stage of implementation?
• How can Africa unleash the social and economic development potential of the AfCFTA while delivering on the Paris Agreement in line with the United Nations Sustainable Development Goal 13 on climate action?
• What would be the economic and environmental impacts of the AfCFTA Agreement’s implementation under the possibility of establishing African carbon markets, or a common carbon price?
• How can industrial transformation and economic development led by the AfCFTA reform be made consistent with Africa’s climate ambitions?
• And how can we promote a green transition through the adoption of climate change policies in the context of the AfCFTA?
• How can the implementation of the AfCFTA’s Protocols promote the green transition and support green industrialisation and what implementation measures need to be put in place to achieve this outcome? 

Presentations

These and similar questions have been a subject of investigation within ECA throughout this year. In two presentations that follow, we will share our findings as follows:

1. In the first presentation titled “Greening AfCFTA Implementation”, we will provide a broad overview of the extent to which the AfCFTA Agreement (including its protocols) reflects today’s environmental concerns and what can be done to mitigate the adverse environmental impact of the AfCFTA through “green implementation” approaches; and
2. In the second presentation, we will share the findings of new research that examines how industrial transformation and economic development led by AfCFTA-induced reforms can be made consistent with Africa’s climate ambitions.

Context

This side event is scheduled to take place on 13 November 2023, which coincides with the Third Session of the ECA Committee on Private Sector Development, Regional Integration, Trade, Infrastructure, Industry and Technology, which will be held from 14 to 15 November 2023 in Addis Ababa, Ethiopia. The theme of the Committee Session this year will be “Boosting regional integration infrastructure, trade, and technology towards a prosperous and inclusive green industrialisation in Africa”. Within this broad frame, the theme of the parliamentary paper prepared by RITD focuses on “Leveraging the African Continental Free Trade Area: towards deeper integration of Africa through inclusive and green industrialization”. The presentation during the side event therefore contributes to the theme of the Divisional parliamentary paper as well as to the overall theme of the Committee directly.